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Lecture four
- 2. Entrepreneurship and the economy
- 3. Effect of MSME internationally MSME are needed for growth of a developing economy since these MSME comprise more than 50% of the manufacturing output of the economy (Gupta and Barua, 2016). MSME is important since they contribute significantly to the economic growth of developing countries. Developing economies find it difficult to sustain a cut-throat competition among other firms and stay competitive due to liberalization and advent of globalization (Gupta and Barua, 2016). Freel (2000) stated that the competitiveness of a nation will largely depend on innovation. This results in the ability of smaller organizations bringing out new innovations as the prime element for competitiveness in the economy. However, there are difficulties for smaller organizations to do this because of problems such as difficult access to advanced technology, incapable managers, limited access of finance and many more.
- 4. The effect of MSME in Indonesia MSME in Indonesia may be the key to the creation of new economic sources as stated by Bank Indonesia (n.d.). MSME has the potential to support employment, mainly female employees, increases the cultural and tourisms potential of Indonesia and preserve the regional cultural image. A speech by Agus D.W Martowardojo which is the governor of Bank Indonesia emphasizes the role of MSME for Indonesia’s economy. He stated that there was a big contribution in Gross Domestic Product (GDP), employment and export. He also claims that MSMEs are a priority for many different ministries, institutions and other relevant parties. He believes that MSME will have economic resilience or high resilience for supporting both the financial system and economic stability.
- 5. Statistics of growth Source: MSME country indicator (quoted by Kushnir, Mirmulstein and Ramalho, 2010)
- 6. Comparison of large business and MSME Large businesses are said to have more impact to a country's economy rather than the smaller businesses as stated in a survey by the EU. The reason for this is that larger businesses will be more productive, pay higher wages, obtain higher profit and will more success when targeting the international market. Even though these large businesses have more impact than the MSME, there will be a lot more MSME than large businesses in most countries. There is also another survey which stated that larger businesses will be more innovative. This is due to the amount of R&D that a large business will do. However, this may not be true since there are lots of new MSME which may have new innovative products.
- 7. References Khrystyna Kushnir, M.L.M.a.R.R., 2010. IFC. [Online] Available at: https://www.ifc.org/wps/wcm/connect/9ae1dd80495860d6a482b519583b6d16/MSME-CI-AnalysisNote.pdf?MOD=AJPERES [Accessed 23 November 2018]. Bank of Indonesia , n.d. Bank of Indonesia. [Online] Available at: https://www.bi.go.id/en/ruang-media/siaran-pers/Pages/sp_196317.aspx [Accessed 23 November 2018]. SocialEconomy, n.d. SocialEconomy. [Online] Available at: http://www.socialeconomy-bcalberta.ca/social-economy/ [Accessed 23 November 2018].